Page 95 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes

Task Visit your nearest bank, make an appointment with the manager and write down
the various ATM and debit card problems he has solved.

Did u know? Some of the different types of credit cards available by banks are:
1. Standard Credit Card: The account holder has to top up the amount once the level of
the balance goes down. An outstanding balance gets a penalty charge.

2. Premium Credit Card: It is also called the Reward Credit Card. Some examples are
airlines frequent flier credit card, cash back credit card, etc.
3. Secured Credit Card: People without credit history or with tarnished credit can avail
this card.
4. Limited purpose Credit Card: There is limitation to its use and is to be used only for
particular applications.
5. Charge Credit Card: This requires the card holder to make full payment of the
balance every month and therefore there is no limit to credit.

6. Speciality Credit Card: For business purposes enabling businessmen to keep their
businesses transactions separately in a convenient way.
7. Prepaid Credit Card: Money is loaded by the card holder on to the card. It is like a
debit card except that it is not tied up with a bank account.

Self Assessment

Fill in the blanks:
3 The benchmark rate, based on which, banks establish the interest rates of various loan
products is known as .............................
4 The rate at which the Reserve Bank of India lends money to other commercial banks in the
nation is ..............................
5 Reverse repo rate is the rate at which the RBI .............................
6 The financial institution accepting payment for the products or services on behalf of the
merchant is known as .............................
7 ............................. refers to storing of the entire day’s transactions together.
8 When a purchase payment in a merchant account is held back due to a dispute relating to
the transaction, it is known as .............................
6.3 Advantages of Bank Account

A bank account is a fund established in a bank by a customer who deposits money against which
the customer may make withdrawals.

1. Bank account facilitates a safe custody of money: The bank is the custodian of cash.
Whenever the account holders need the money, they can withdraw it depending upon the
type of account.

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